August 2024 MBS Highway Housing Index

The MBS Highway National Housing Index dropped 2 points in August 2024 to 42. Lower mortgage rates in July helped to improve buyer activity, but home price momentum slowed. Looking forward, two factors will drive the index: the normal seasonal slowdown, and likely Fed rate cuts beginning September 18.

National Data

The MBS Highway National Housing Index dropped 2 points to 42 in August 2024. While this was the fourth straight MoM decrease for the overall index, it was a much smaller drop than we experienced in July. The reason for this is clear: a 37 basis point (0.37%) drop in average 30-year mortgage rates over the month, which lifted buyer demand in most regions.

The national Buyer Activity sub-index rose 3 points to 40 in August 2024, after having dropped 8 points to 37 in July 2024. In August 2023, the Buyer Activity sub-index was at 44. Average mortgage rates have dropped in each of the last three months, encouraging some buyers back from the sidelines, and also reigniting refinance activity.

The national Price Direction sub-index fell 5 points to 45 in August 2024 — below the expansion/contraction breakeven point of 50 for the first time since December 2023. In August 2023, the national Price Direction sub-index was at 57.

Regional Data

Buyer Activity levels increased modestly in five of the seven regions, with only the Northeast (56 → 58) and Mid-Atlantic (48 → 50) at or above the 50 breakeven point. The least active regions were the Southwest (26 → 34) and Southeast (28 → 29).

Five of the seven regions saw their Price Direction sub-indexes move lower, most notably the Midwest (64 → 49), Northeast (77 → 63), and West (59 → 48). Only the Mid-Atlantic and Northeast stayed above 50.

“We are entering the slower season with lower activity levels and home price momentum than we had a year ago. However, the prospect of a new Fed rate cut cycle (and lower mortgage rates), combined with more balanced supply/demand in many markets, could deliver positive surprises this fall,” said Barry Habib, MBS Highway’s Founder and CEO.